Analyst Says Boo to $60 Games
I was browsing Joystiq when I came across an interesting article from GameDaily BIZ. The gist of the article is that analyst Jeetil Patel of Deutsche Bank has decided that the $60 price for games isn’t sustainable, judging by recent price slashing by EA, which comes much earlier than it usually does, historically. Huzzah, says I. Somehow I doubt that increased cost to produce a title merits a $10 increase over last generation’s games, skipping right over a $5 increase, which might have been more palatable. Let’s take a little more logical look at this whole situation.
PC games should be just as expensive in terms of assets in order to compete with the new consoles, plus there has to be added development cost in order to make sure that a title will work on the widely varied hardware that will be used to play them. Why, then, do prices for new PC releases vary between $40 and $50? The market for PC games is much smaller than for console games, so perhaps they believe that the higher price would drive PC gamers away entirely. But then, why make PC titles at all, if you can’t charge this exorbitant fee to recoup the increased costs of making games in this day and age? Surely they would be losing money on PC titles if they really needed the extra 10 dollars per copy to break even.
Higher prices for console games actually frightens me, as a programmer trying to break into the game industry. I can’t help but look at the trend of rising prices and compare to what happened to arcades in the US during the 80’s. I used to love going to arcades as a kid. Whenever my parents would take me to the mall, I’d blow most of my allowance at the arcade and thought it money well spent. I’d have something to keep me entertained for an hour or two and I wouldn’t have to follow my parents around as they stopped in Macy’s, Hecht’s and whatever other god awful department stores they wanted to go to. I even thought I would have to go without eating for a day on a ski trip because I didn’t have enough money to pay for food after an extended stay in the arcade. But the popularity of the arcades started to slide when home consoles started catching steam, and as their popularity waned, prices skyrocketed, doubling and quadrupling within a few years. Instead of bringing in some extra revenue to make up for the lower attendance, arcades became ghost towns. There’s a big difference between being willing to spend a few dollars for an hour or so of entertainment to current day standards where a few dollars might let you play two games if you’re lucky. And what happens when game prices rise so much that nobody buys them anymore? I cry, because I won’t have a job anymore.
Obviously, I’m not a business manager in charge of a publishing house (or an arcade), so maybe these price increases really are inevitable, but the game industry isn’t doing themselves any favors in the way that they’ve chosen to go about it. It really feels, as a consumer, more like the big publishing companies wanted a way to increase profits and everyone is just going along with it. The increase in hardware prices is hard enough to swallow (really, Sony, do you expect people not to notice the PS3 costs twice what the PS2 did?), but the jump in software price is even worse. There’s a reason the only new console I’m considering right now is a Wii.
